IMPLEMENTATION OF SOVIET OBJECTIVES IN CHINA (ORE 45)

Created: 9/15/1947

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IMPLEMENTATION OF SOVIET OBJECTIVES IN CHINA

IMPLEMENTATION OF SOVIET OBJECTIVES IN CHINA

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1MPLEMEN TAT ION OP SOVIET OBJECTIVES IN CHINA

Objectives In China

The long-range Soviet objective in China ic believed to be identified with the Soviet objective in all areas adjacent to the USSR: to extend the control and influence of theerever and whenever possible by all means short of war, and to reduce the control end influence of other major powers in such areas. ere limited and store immediate Soviet objectiveby the urge to achieve security from foreign aggressionaims toward continuing control over the resources and development of Manchuria, and the maintenance thereegime sympathetic to the USSR. Manchuriaital strategic link with Korea and the Soviet Karl time Territory, and possesses agricultural and raw material wealth that significantly complements the expanding industrial potential of Eastern Siberia. At the same time, denial to thc Chinese National Government of Manchuria's substantial resources and industrial potential tends to weaken China's ability to offer effective resistance to further Soviet expansion. While Manchuria represents the major direction of current Soviet interests, the USSR will continue to exploit the opportunities for expanding its influence ln other border areas of China: Inner Mongolia and Slnklang Province.

Actions by the USSR to Further Its Objectives

Certain measures which the Soviet Union has taken to further its objectives during thc past two years arc clearly evident. They include: egotiation of the Sino-Soviet Treaty ofhose terns assured theosition of influence in Manchuria:anagement of the Soviet occupation of Manchuria in the periodS to late6 so as to hinder the movement of Nationalist troops, facilitate thc establishment of Chinese Communist control, and contribute substantially to the military potentiality of the Chinese Conmunict Parly (CCP) by affording the latter an opportunity toarge volume of Japanese arms and equipment;he stripping of Manchurian industries:ffective denial of the Dairen area to the Chinese National Governmentegalistic Interpretation of Lhe Sino-Soviet Treaty. These measures, which are more fully described in Enclosure A, have hod the effect of strengthening the potential of the CCP or of weakening that of the Chinese National Governmeni. They have thus tended toalance of power between the opposing Chinese forces, and to intensify the civil conflict and the attendant conditions of instability and chaos in China.

Allhough continuation of civil conflict and instability in China effectively serves Soviet interests and alms, there is little further action thatR need tako to promote such conditions, so long as the Chinese Nationalistadministration remains ln its existing state of incompetence and

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disorganization. (Current Chinese Communist military successes appear to stem as much from the qualitative and quantitative decline in themilitary potentialattended by the Communist capture ofNationalist military suppliesas from Communist superiority in the employment of forces.1 Nevertheless, the USSR may have found it desirable to extend some additional and inconspicuous aid to the CCP, if only tothe security of Kanchuria and to hedge against the possibility that the Nationalist potential might be increased by internal reform and by military aid from the US.

As set forth in Enclosure B. there is some evidence that supports, while it does not conclusively prove, the thesis that the USSR has been extending concealed aid to the CCP in recent months: additional supplies of munitions (probably of Japaneseigh-level technical assistance. North Korean troops (largely for non-combatse of Dairen port facilities and of Soviet vessels to facilitate the movement of supplies betweenareas in Manchuria and Shantung. The evidence includes reports from sources other than the Chinese National Government, which has beenin its charges that the USSR has currently been supporting the CCP.

Soviet aid in recent months does not appear to have been of majorin Chinese Communist operations thus far, but may prove of greater benefit to thc Communists in forthcoming operations.

3. Role of the CCP in the Implementation of Soviet Policy

Examination of the developments in Chinaeriod of many years, and of the character of Soviet measures described above, leads inevitably to the conclusion that the most effective instrument of Soviet policy toward China is the CCP. The Chinese Communists are ideologically sympathetic with and oriented toward Hoscow, and will continue to cooperate with the Soviet Union so long as the CCP itsolf is engagedtruggle for power in China.

A China completely dominated by the CCP, assuming that the latterclosely allied to the USSR, would ideally serve long-range Soviet interests in China. However, it is doubtful that the USSR either expects or hopesompletely communized Ciiina for several years to come. The Kremlin's machinery for asserting political control abroad is at present severely taxed by Soviet commitments in Europe. This strain would be vastly increased by the assumption of responsibility for supporting andommunist regime for all of China. In addition, Chinahole can contribute little to Soviet economic needs in the near future. The USSR's foreseeable requirements can better be met by the more highly developed skills and industrial facilities of Europe. It is therefore unlikely that the USSR would wish to place this additional burden on the world Communist program until tne situation in the West lias become more stable.

It must also be considered possible that the USSR would actuallyontinuation of instability and the development of regionalism in China

SCfipTET

conditions that would accompany the Chinese Communist struggle for powerto the final achievement of central power by the CCP. reference would be corollary to Soviet uncertainties about any strong centralln China. Over the period of cone three centuries. Tsarist and then Soviet Russia's position in eastern Asian terms of territory, political and economic Influencehas tended to expand with the weakening, and to contract with the strengthening,entral political authority in that area. The USSR might logically believe that the CCP, once it achievespower ln China, will exhibit much the same degree of nationalism and xenophobia that characterizes the present Chinese Nationalist regime. may also entertain some misgivings as to whether the CCP would be able to achieve and retain supreme control throughout China without makingadjustments and compromises with non-Communist elements within and outside Chinaadjustments and compromises that might ultimately leadCommunist China" bearing little resemblance to the puppet governments found in European Communist satellites.

whether by force of circumstances or by preference (orhe USSR probably looks forwardong period of instability in China. Tothat' instability, the Soviet Union will probably take at leaststeps ln support of the CCP, whenever such support appears

4. Future Developments

Only tentative estimates can now be made of future Soviet actions to further Its objectives in China. The character and timing of such actions will undoubtedly be closely associated with developments in US relations with both China and the USSR, and con also be expected to respond toand economic trends in Europe as well as in Asia. The moat natural point of departure for making tentative estimates of future Soviet octlon would appear to be the portrayal of conditions in China ill if US assistance lo the Chinese National Government is withheld,f US assistance is extended.

If tne Chinese National Government does not receive early assistance fron the United States, many months, and perhaps years, will elapse before the USSR Is confronted with the necessity of supporting Chinese Communist forces beyond the limits of indirect or concealed aid of the type thus far extended.

It is conceivable, but not now considered probable, that Moscow willrogram of open and direct action in China before the necessity arises, in order to divert US attention from Europe and to induce the US to expend Its efforts and resources on two major fronts. In June andhere were several assertions, largely by Soviet citizens in Shanghai and purportedly representing the views of Soviet officials there, that II) thevacuation of Soviet citizens and recall of Ambassador Petrov from China marked the first stepsget lough with China" policy:he

has decidedolicy of counteractionis the Nankingand the US:he USSR will break off diplomatic relations with Cnina In7 ornd concentrate all its attention on Kanchurla and Sinkiang. More recently, however, Soviet officials in China nave reportedly predicted that Petrov will return to China, and that there will be no change in USSR policy toward China unless the US policy changes.

One of the controlling reasons why the USSR would tend to avoid direct action before the necessity arises is believed to be the mere expense ofrogram. In addition, unconcealed intervention in China might also promote the dangerollision with the US, and would undoubtedly weaken the Soviet position In International negotiations. The Slno-Sovlet Treaty, for example, stipulates that the USSR shall respect Chinese sovereignty, shall not interfere in China's domestic affairs, and shall render moral support and military aid entirely to the Cninese National Government. the Soviet Union may perceive certain broad advantages in notItselfrogram of direct action against the Chinese National Government so long as Japanese peace treaty negotiations are in progress. By avoiding overt action that would intensify the Chinese Nationalfear of thc USSR and destroy any Government hopes of gaining Soviet cooperation in Manchuria, Moscow would beore favorableo encourage Chinese Government opposition to any peace treaty proposals that would strengthen Japan's position in Asia,oole as defender of Continental Asia against "US-supported Japanese imperialism".

If, on the other nand, the Cninese National Government receives US assistance tending to strengthen the Nationalist potential for waging civil warfare, it is believed that the Soviet Union will weigh alternative lines of action more in terms of the security of its position in Manchuria than in terms of the position or fate of Chinese Communist forces in China proper. So long as the National Government appears incapable of re-establishingin Manchuria, it is anticipated that the Soviet Union will continue to avoid open action against that Government. But in tne eventery substantial US military aid program to Cninaajor reform In the Nationalist administration increased the Nationalist potential to the point of threatening the status quo in Mancnuria, it is considered possible tnat the USSR night resort to direct action to counter that threat.

Al any time in the future thc USSR may also find it opportune toits empnasis on other border areas of China: Inner Mongolia and Sinkiang Province. In these regions, the Soviet Union possesses the special advantages of geographical position, actual local Influence,national minorities" policy tiutt strongly attracts the Mongol and Turki peoples of eastern Central Asia. Tne USSR is, therefore,ighly favorableto capitalize upon the principal causes of unrest among these large and widespread non-Chinese groups: deep-rooted dissatisfaction with Chinese rule, and appreciation of the relatively better circumstances of the hongol-Turki populations in adjacent Soviet or Soviel-conlrolled Soviet influence is discernible in the encouragement which Chinese

Communist and Outer Mongolian elements have given to Innerloiters' attempts to create an autonomous government it it LT*that the USSR has played an indirect, but effective rollautonomous movements by native groups in Sinkiang Province the Outer Mongolia-Sinklang borderand

ENCLOSURE A

KNOWN ACTIONS TENDING TO PROMOTE SOVIET OBJECTIVES IN CHINA

1. Sino-Soviet Treaty of

The basis for the Sino-Soviet Treaty was laid at the US-UK-USSRln Yalta. The Treaty Itself was negotiatedime when the USSR was in an extremely strong bargaining position, with Soviet occupation troot due to establish effective control throughout northeastern China, and with the Chinese National Government faced with the possibility that too vigorous objections to Soviet demands would result in Soviet support of the Chinese Communists. The USSR was thus able to obtain Important special rights ln Manchuriaeriod orears, including: oint use witn China of the Port Arthur Kaval Base Area, which encompasses most of then-tung Leasedease of one-half of all port Installations in Dalren (which the Chinese Government agreed toreeoint ownership and operation of the "Chinese Changcnun Railway",Manchuria's two main trunk lines--the Chinese Eastern and South KanchurianJoin at Harbin and link Central Siberia,and Dairen. Auxiliary rail lines, subsidiary enterprises, and lands directly serving the main trunk lines, if built or acauired during Russian or Sino-Soviet administration, were also to be Jointly owned and operated.

It is obvious that even if Manchuria were under actual control of the Chinese National Government, the Soviet Union would still be assuredtrong position in that area, economically and strategically. However, othe: actions taken by thc USSR, which have helped prevent Nationalist re-entry into Manchuria, and generally weakened the Nationalist potential relative to that of the CCP, indicate that Soviet objectives in Manchuria extend well beyond the above-named Treaty rights.

2. of Manchuria6 to late

During the Soviet occupation, the Chinese National Government attem;ted to move troops into Manchuria to re-establish Chinese control, but was hampered and delayed not only by local volunteer forces ln thc area,lso by Soviet occupation authorities. Nationalist freedom of movement and

As used here, the "Sino-Soviet Treaty" includes: ill the basic Treaty of friendship andhe separate Agreements on Port Arthur. Dairen, the Cntncse Changchun Railway, ana the presence of Soviet trcjps in thc "Three Eastern Provinces"he separate Nc'.es on Soviet Aid to the Central Government of China and Chinese sovereignty over Manchuria and Sinkiang. and on Outer Mongolia.

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activity was severely restricted and Manchurian port facilities were denied to the Government. On the other hand, the movement of Chinese Communist troops into Manchuria apparently was permitted with freedom. nown, for example, that several thousand Chinese Communist soldiers arrived in Mukdeny rail from North China.

elay of several months, the USSR decided to withdraw its forces completely from Manchuria by the end of Partial evacuations from certain areas had taken place earlier, with little or no priorto the Chinese National Government. The latter did obtain, onoviet note giving the target date for complete withdrawal, but that note contained no area-by-area schedule for evacuation. Chinese Communist forces were thus placedighly favorable position to replace theSoviet occupation forces, thereby gaining physical control over most of Manchuria.

Intelligence reports correctly emphasize the importance of the "capture" of great suppllen of Japanese arms and eouipment by the Chinese Communist forces after they replaced the- Soviet troops in Manchurir.. Somewhat less ell known is the fact that at least part of such Japanese supplies fell into Chinese Communist hands even during the Soviet occupation. rained US observer personally saw unarmed Communist troops enter the Japanese arsenal in Mukden while it was completely under Soviet control and Soviet guurd, and subsequently saw those troops energe fully armed. (Other sources,anchurian ex-puppet officer,zech refugee in Dairen, cite similar episodes in Soviet-controlled areas containing Japanese Army materiel.1

3. Soviet Strlptitng of Manchurian Industries

The selective removal of- Industrial machinery from Manchurian factories by Soviet forces as "warnd the subsequent looting of suchby local mobs and later by Chinese Communists, cut the heart out of Manchuria's highly developed industrial structure. Soviet forces apparently made no attempt to preserve order. Soviet removals provided the USSR with substantial quantities of carefully chosen equipment, and the stripping and looting made certain that Manchurian Industry could not be reconstructed auickly or without large capital outlays.

The Soviet action in removing key equipment from Manchurian industry, effective Soviet retention of Dairenlosed port (described belowj, and credible reports that substantial quantities of soybeans, grains, and coal have been moving to Siberia from Communist-controlled areas in Manchuria, all support the belief tnat Soviet policy is aised at Makinge-indusirlallzed source or food and raw materials for the Soviet Far East. e-Industrialized Manchuria, of course, alsoinimum military threat lo the USSR.

Denial of Dairen to_the Chinese National Goveriunent

The USSR has consistently refused to allow the Chinese Nationalto send troops to the port of Dairen. Chinese Government objections have been countered by legalistic Soviet claims that the USSR has the right to extend to Dairen its military Jurisdiction over the Port Arthur Naval Base Area until the Japanese peace treaty is signed." In taking this attitude, the USSR has been fully aware of the Chinese National Government'c unwillingness toivil administration to the area without military support, an unwillingness resulting from the virtual land blockade of the Dairen-Porl Arthur area by Chinese Cceiwuiist forces and from the presence within that area of Soviet and Soviet-puppet troops.

By Its effective denial of Dairen to the Chinese National Government the USSR greatly hindered that Government from supplying the rest of Manchuria with "take-over" troops and supplies during the period of Soviet occupation and withdrawal. Since the springhe Chinese Government has been similarly Impeded ln its efforts to reestablish control in Manchuria.

Relevant sections of the Sino-Soviet Treaty are: (Il "The Chineseentrusts to the Soviet Government the defense of the (Port Arthur! NavalIn peace time Dairen is not included in the sphere of efficacy of the (Port Arthur! Naval Basend shall be subject to to the military supervision or control established in this zone only in case of war against Japan." The Soviet argument that the "war against Japan" will not end until the Japanese peace treaty is signed has been bitterly attacked by the Chinese National Government.

ENCLOSURE D

EuinyMrsnrjwri^^SOVIET AID TO THE CHINESE COMMUNISTS

The elimination of most means of direct observation at logical Soviet-Chinese Communist points of contact has made it increasingly difficult to establish proof of the extent of current Soviet aid to the Chinese An attempt has been made here to present, where possible, evidence from sources other than Chinese National Government officials. Indications of recent Soviet aid wnich has been of some significance to the Chineseand which nas strengthened the position of the USSR, particularly in Mancnuria and Korea, are set forth in following paragraphs.

1. Additionalunltlo:.-

Additional supplies of sunitioos may have been made available by the Soviet to the Chinese Communist Forces since thevacuation of Mancnuria in Although no US observer lias yet ascertained mat any Soviet-made materiel has been used by Cninese Communists in current offensives, there is some evidence that the Soviets have made available additional supplies ofKw/wtung Army stocks which they removed from Mancnuria and which they are new returning in exenange for foodstuffs. Reports sinceargely from Nationalist sources, have indicated that the USSR nas revived rail traffic between Harbin and the USSRarter trade agreement with tne Chinese Coirrt'unists. This trade nod reportedly reached an export rateC0 tons montnly orillion tons annually. Manchurian exports nave consisted of soybeans, wheat, beef, pork, kaoliang, millet, and furs, which have beenfor imports of coal, kerosene, perfume, matches, cigarettes and otner commodities. It has been suggested tnot the "otner commodities" includesupplies. One Chinese observer rocorts trial in June or6 ne saw cases marked "grenades" and "artillery snellsin one careavily tj*rdec train returning from the USSR.

Thc increased firepower of the Cninese Communists during theuttle for Ssupingkai, which has been Confirmed by US observers, may indicate the acquisition of new supplies of munitions ty the Conrunist forces. Trc editor-In-chief of tne independent Ta Kung Pao. nowever, naa made tne lof.cal point that tr.is is not necessarily proof of Soviet aid, but may simplyorn active employment by Chinese Communist forces of the large supplies abandoned earlier by the Japanese and oT supplies captured from Nationalists in current campaigns. General Suneputy Commander of tne Nationalist Forces in Mancnuria during theommunist offensive, nas made nc rlair otner than that the Comounists were using captured Japanese materiel.

Outside of Manchuria there nave been continuing reports, some from neutral observers, mat Soviet small arms and Japanese machine guns, carbines, mcrtars

and artillery nave been transported in Soviet vessels fron Dairen to the Cninese Comuniet forces in Shantung througn the Communlst-helo port of Cnefoo. No evidence is yet available from Shantung wnlch confirms the use of this materiel.

No otner evidence has yet been secured which would suggest or confirm the fact that Chinese Coomunist successes or advantage In any area can be attributed to any large-scale current receipt from the USSR of Soviet-made or Japanese materiel. It snould be noted, however, that appropriate lines of communication from the USSR to Manchuria and from Dairen to Snantung still exist and that Soviet movement over tnese lines of communication nas been confirmed.

2. High Level Lfralaon and Technical Assistance

Liaison between the Soviets and the Chinese Communistsign level undoubtedly exists. However, no proof of its actual implementation has yet been authenticated by US observers. Prior to the Soviet withdrawal rrom Mancnuria. US observers transmitted reports of several conferences between hign-ranking Chinese Communists and Soviet military commanders, but tnese reports emanated originally from Chinese National Government sources. The latter claimed, for example, that: in Piao, Cninese Comrunlst Com-mander-in-Ciiief ln Manchuria, and two other Chinese Communist coimanders, were seen in Mukden wnere tneyonference with local Soviet companders onther Chinese Conmunlst conferences were held in Klrln, Anlung and Tune-Hua. tne latter ones attended by tne Soviet Com; ander of the Mukden area.

Inocument containing an agreement allegedly reachedChinese Communists and Soviet officials at Red Army Headouartcrs in Mukden on January 9.6 was made available in6 to Americanbyigh Cninese official". Tne US Consul General at Mukden, in commenting on tins document, conceded mat the Soviets "are hardly innocent of involvement in Manchurian affairs" but observed that tneitself seemed to indicate that It might be someinin* "invented after tne fact" to incriminate the USSR and aimed at enlisting US sympathies on the side of the Cninese National Government against thc USSR and the Chinese Communists. US EmCassy Nanking concurred witn inese observations, and was of tne opinion that tne documentKuomintang plant".

Tnere continues toreat deal of speculation bul no confirmation as to the nature of possible high-level liaison undertaken from Mancnuria by Li Li-san. LI Li-san. who fled to Moscowplit with Mao Tse-tungeturned to Mukden in Manchuria in If it is established ihat Li actually is an effective political adviser to the Cninese ComirunisL military forces and tnat neart of or the leadertrong pro-Soviet clique within tne CCP, it is probable that Li personallyignificant channel for Chinese Comjrunist-Soviet liaison.

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Although Chinese Nationalist claim of Soviet participation in battle have not been substantiated, tnere has been some indication of Soviet training and technical assistance which may have been of direct help to Chinese Communist forces, ln6 the US Consul General Dairenthat the morale and efficiency of the Chinese police ln Dairen had visibly increased and that "it is obvious that they are carefully and systematically trained". Again ine reported that the Soviet military ln Dairen were training the Chinese police in the use of the rifle and bayonet. Although tne movement from Dairen of these trained Chinese has not been confirmed. Chinese Nationalist sources have indicated that these trainees in groups of several hundreds have been sent to Chefoo and Antung Tor service under the Chinese Communists. S oil company official, who left Dairen lneports that the transfer of trainees to Cnlnese Communist forces is "generally known". As yet there has been no conclusive proof that Soviet-organized training centers for Chineseforces are maintained ln Northern Manchuria nnd Siberia, as reported by Chinese Nationalist sources and by repatriated Japanese. These reports include claims that: CI) twelve Soviet training centers for ChineseForces,oviet-organized aviation school headed andby Soviet-trained Chinese. Koreans and Japanese, are located in Northernoviet military training centers for ChineseForces arc located at Chita. Siberia and near Lake Khanka.iles north of Vladivostok.

3. Fjnployraent of Korean Troops

During the past several months, US observers in China and Manchuria have been unable to substantiate Chinese National Government charges that many North Koreans are engaged in actual combat in Manchuria on tne side of tne Chinese Communists. These charges include: n assertion tnat more thanoreans trained in Northern Korea were recently in action with thc Chinese Communists in Manchuria:tatement by General Chen Cheng. Nationalist Chief of Staff, that it wasniversally acknowledged fact that Russian-trained Korean Communists are fighting on the side of thc Conrmnists in Manchuria".

However. US observers in South Korea, particularly trose wltnection of the XXIV Corps, nave transmitted sufficient evidence to justify the conclusion tnat some form of aid is being provided by North Koreans in Manchuria. Determination of the extent and character of sucn aid is difficultanchuria itselfarge Koreanoreans were reported in Manchuriat isthat some units of tne Korean Volunteerormed from Korean anti-JnnaneGe guerrillas under the auspices of the CCF during the Japanese occupation of Koreal are still with the Cninese Ccnnunist forces. Tne available evidence from all sources suggests tnat the Norm Korean elements that have joined with Chinese Communist forces in Manchuria nave thus far been kept in the background and away from tne fi puling fronts. Presumably, they have been engaped in training and in performing garrison and service functions.

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Indications of possible cooperation between the Chinese Communists and the Soviets in North Korea date back to the roll and winter. After the surrender or Antung to the Cninese Nationalists inhe presence or Chinese Communist troops In North Korea "is rrequently In7 the XXIV Corps estimated that there were00 Chinese Communist troops in the Soviet Zone. Usually reliable sources indicated that North Korean railroads were used for transporting these troops during6 and7 and that the functions of billeting and supply were shared by Uie Soviet Army Command and the North Korean Peoples Committee. Although the nature of Chinese Communist activities in North Korea during this period nas not been definitelyit was reported that they were in training and that they were using the areaase for operations against Chinese Notionalists in eastern Manchuria.

Recently the XXIV Corps has secured information, chiefly fromof refugees from the North Korean Peoples Army, which lends tothat North Korean troops have been moving into Chineserolled areas of northeast Manchuria. 'The USSR has not admitted that thereorth Korean Peoples Army, but considerable reliable evidence of its existence and development is available.) XXIV Corps reports include:tatementormer officer of the North Korean Peoples Army that battalions of the Amy had been fighting together with the Chinese Communists along the Manchuriantatement that Peoples Army forcesin North Korea were sent to fight off Nationalist troops along an east Manchurian rail line;laims that liaison between the North Korean Peoples Committee and the Chineoe Communist forces in Manchuria was established in the fall6 to control thc assignment of North Korean troops to the Chinese Communists. Tne Tact that no trained tactical units of the North Korean Peoples Army have as yet been located in North Korea itseir appears consistent with several reports that upon completion of proscribed training in North Korea, Korean troops are transrerred toand absorbed into the Chinese Communist forces.

Such transfers would logically serve to further Soviet aims in several ways: ll) they would provide some assistance to the Chinese Communist forces;hey would give the North Korean troops experience in or near actual areas ofhey would alleviate the problem of supplying food Id troopi from the food-dericit areas of North Korea. In connection with theorean foodmall number of Koreans captured by Nationalist forces in theanchurian operations haveS Assistant Military Attache that they hod joined tne Cninese Communists voluntarily and only forreasons, such as unemployment,food, etc." However, it should be noted that the North Korean food situation itself is partly the result of Soviet withdrawals of food from that area, for shipment to Vladivostok and Dairen.

It would obviously be to Soviet advantage if the transfer of North Koreans tu Manchuria had the characteratural and voluntary movement, rather

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than one forced upon thc north Koreans. However, in view of the intense nationalism of the Korean people, and their traditional unwillingness to cooperate with neighboring countries, considerable indoctrination would be necessary to encourage Korean-Chinese Coimumet cooperation. There is evidence that Soviet authorities in Worth Korea have been engaged in Just such an indoctrination effort. The XXIV Corps has transmitted reports that Koreans along the Yalu River Iseparating Korea from Manchuria) have been told that General Hodge, Rhee Syngman and Chiangreactionaries according to Soviet propaganda--havc actually agreed to attack North Korea in the near future.

4. Use of Dairen Port Facilities and Soviet Vessels

It is evident that the Chinese Communists have derived some advantage from the acLive junk trade carried on between Chinese and Korean ports and Soviet-controlled Dairen. An even more important form of assistance, at least to the Chinese Communists in Shantung Province, appears to have been provided by the movement of Soviet vessels between Dairen and the Shantung port of Cnefoo.

The US Consul General Dairen has ropoited that onoviet vessel left Dairen for Chefoone-day trip) with trucks, tires, end auto parts on board. One day later, CNRRA and UNRRA personnel at Cnefoo noted the arrivaloviet vessel at that portargo whichtrucks as well as Chinese passengers. According to the Chefoo sources, the same vessel had also put in thereune, and on that trip had carried pig iron and "wooden cases". Unloading on both trips was reportedly carried out at night by Chinese Communist soldiers "with the utmost secrecy". It was further claimed that the Soviet vessel apparently had timed its arrivals

o take advantage vl essel iis

security from Chinese Nationalist air att-ics.

There is no doubt that the Chinese National Government has been deeply concerned about the Dalrcn-Shaiitung traffic. onnection with this move meni. the Nationalist commander in Shan twig Province has stated that if Dairen were restored to the Nanking Government, the war in Shantung could be shortenedonths. Further indication of the importance winch theovernment attaches to the Dairen-Shantung traffic is found in tnat Government's order .ofnch declares that the pen cf Dairen is closed to foreign shipping. This order was issued despite the fact that: n the Sino-Soviet Treaty the Chinese Republic agcees "to declareree port open to the commerce and shipping of nil nations"he US hadote to the Soviet Government onugi.st again calling attention to the Soviet delay in opening Dairen to international commerceree port.

There haseported increase in Soviet shipping on the Daircn-Vledivosiokoute which mayhannel of direct assistance to the Chinese Communists. However, this increase may represent only the normal shipping requirements of the Soviets in the Dairen area and the normal increase which could be expected during the months that Vladivostok is an ice-free port.

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